Builder's Risk Insurance: What Pennsylvania Contractors Need to Know

Builder's risk insurance is one of the most important — and most misunderstood — coverages in the construction industry. If you're a contractor or developer working on a project in Bucks County or Montgomery County, here's what you need to know about this essential policy.

What Is Builder's Risk Insurance?

Builder's risk insurance (also called course of construction insurance) is a specialized property policy that covers a building or structure while it's under construction. It protects against physical loss or damage to the project from covered perils such as fire, wind, theft, vandalism, and certain water damage events.

Unlike a standard commercial property policy, builder's risk is designed specifically for the unique exposures of a construction project — including materials stored on-site, materials in transit, and the structure itself as it's being built.

Who Needs Builder's Risk Coverage?

Builder's risk policies can be purchased by:

• General contractors — often required by the project owner or lender
• Property owners/developers — protecting their investment during construction
• Subcontractors — when they have an insurable interest in the project

Lenders financing construction projects in Pennsylvania almost always require builder's risk coverage as a condition of the loan.

What Does Builder's Risk Cover?

A standard builder's risk policy covers:

• The structure under construction
• Materials and supplies on-site
• Materials in transit to the job site
• Temporary structures (scaffolding, fencing)
• Soft costs (architect fees, permit costs) — with an endorsement

Common Exclusions

Builder's risk policies typically exclude:

• Faulty workmanship or design errors
• Employee theft (covered under a crime policy)
• Flood and earthquake (available as endorsements)
• Mechanical breakdown of equipment

Top Carriers for Builder's Risk in Pennsylvania

The Stoll Agency places builder's risk policies with leading carriers including Travelers, The Hartford, and Liberty Mutual. We'll match your project type, size, and timeline with the right carrier and coverage structure.